Scotland's economic recovery is now “firmly embedded” though inflationary pressures “remained notably higher” than the rest of UK, according to a monthly survey of purchasing managers compiled by Bank of Scotland.

The bank's latest Purchasing Managers' Index (PMI) survey, collated from answers provided by around 600 companies operating in the manufacturing and service sectors, suggests business activity rose at its fastest pace in three months in June.

Employment accelerated across by the manufacturing and service sectors in June, with the speed of job creation having risen at the fastest pace since the record high reported in February.

Private sector employment rose at the second-fastest rate recorded since the survey began in 1998, helped by a further increase in work backlogs.

Bank of Scotland's June PMI data also points to further rises in input costs, which rose at their fastest pace since February, with salary increases cited as the main factor by the survey panel.

The report states businesses raised their output prices “to cover at least part of the burden of higher costs,” and the June price rises were “slightly more marked than in May, though only moderate and slower than the rate of cost inflation”.

The Bank of Scotland report adds: "Overall, inflationary pressures in Scotland remained notably higher than across the UK as a whole."

The latest PMI score for June rose to a three-month high of 55.9, which was up May's score of 54, which was a 13-month low.

Any score above 50 points to economic growth and a score under 50 points to economic contraction.

New export orders are also reported to have stabilised following four months of reported declines.

The PMI report states: “Demand for Scottish manufactured goods continued to rise during June, as highlighted by a further increase in the level of new orders placed with businesses operating in the sector.

“The current sequence of growth in new work now stands at one-and-a-half years. Although the slowest in three months, the rate at which new orders increased remained solid in the context of historical survey data.

“June data pointed to little change in the level of new business placed with Scottish manufacturers by overseas clients.

“This was signalled by the seasonally adjusted New Export Orders posting broadly in line with

the neutral 50.0 mark.”

Commenting on the latest PMI report, Bank of Scotland's chief economist Donald MacRae, said: “Growth was evident across both manufacturing and services with business services leading the way.

“After four months of decline, new export orders stabilised while levels of new business rose across the economy.

“Employment growth was accompanied by rising salaries providing further evidence of increasing business confidence. The recovery in the Scottish economy is now firmly embedded.”